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On June 5, 2013, President Obama issued the Executive Order 13645 “Implementing Sanctions Set Forth in the Iran Freedom & Counter-Proliferation Act of 2012” that would become effective on July 1, 2013.

EO 13645 implements several statutory provisions of Iran Freedom and Counter-proliferation Act (IFCA) of 2012 but also imposes additional sanctions. Click here to read the entire Client Advisory.…
Read More Client Advisory – President Obama Issues Executive Order Imposing Additional Iran Sanctions

Other state insurance regulators have responded coolly to the report released by the New York Department of Financial Services on June 12. That report recommended that “State insurance commissioners should consider an immediate national moratorium on approving additional shadow transactions until those investigations are complete . . . .” …
Read More Delaware Rejects New York’s Call for a Moratorium on Securing Reserves with Captive Insurance Companies, While the NAIC Refuses to Act Hastily

On June 12, 2013, the Treasury’s Federal Insurance Office (“FIO”) released its first annual report on the insurance industry to the President and Congress, as mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). The Report discusses in more detail a number of the items covered in the Financial Stability Oversight Council’s (“FSOC”) last annual report, issued this past May.[1] …
Read More FIO Issues Its First Annual Report

On June 11, 2013, the New York Times reported that New York Superintendent of Financial Services Benjamin Lawsky joined the debate on the increasingly-popular use of captives and Special Purpose Vehicles (“SPVs”) to reinsure “XXX and “AXXX” reserve redundancies. Mr. Lawsky believes that life insurers are engaging in “shadow insurance” by taking advantage of the laws in other jurisdictions to use what he calls “hollow assets” to support reserves that would traditionally not be approved in New York, such as parental guarantees and conditional letters of credit. …
Read More NY Times Reports Comments by NY Superintendent on Reinsurance Transactions within Life Insurance Industry

This updates our May 17, 2013 blog post.

On June 3, 2013, Connecticut Governor Dannel Malloy signed into law HB 5072 (the “Bill”), restricting insurance companies and affiliated entities from influencing insureds into using specific automotive glass repair establishments. …
Read More UPDATE: Connecticut Enacts Auto Glass Repair Disclosure Bill

Late last month, Rep. Gary Miller, R-Calif., and Rep. Carolyn McCarthy, D-N.Y., introduced the “Insurance Capital and Accounting Standards Act of 2013” (H.R. 2140 or the “Act”) into the U.S. House of Representatives. The Act is in response to last year’s proposal by the Federal Reserve Board to apply certain capital requirements for financial institutions (i.e., Basel III global capital standards) to insurance companies that are part of depository holding companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). …
Read More U.S. House Introduces Legislation Regarding Capital Requirements For Insurers Subject To Dodd-Frank

Martin Lister, a Hong Kong-based partner in Edwards Wildman’s Insurance and Reinsurance Department, discussed how Hong Kong will be establishing a new independent super regulator for the insurance industry in Global Reinsurance. In the article, “How Hong Kong is Preparing for its New Super-Regulator,” Lister said, “There will be some discomfort in the industry because these guys have got to do something. They may have 200 employees and 120 of them will be new. …
Read More Edwards Wildman’s Martin Lister Analyzes How the Hong Kong Insurance Industry is Preparing for a New Super-Regulator in Global Reinsurance

On a call held this morning, the Captives and Special Purpose Vehicle Use (E) Subgroup of the Financial Condition (E) Committee of the National Association of Insurance Commissioners (“NAIC”) adopted a draft of the Captives and Special Purposes Vehicles White Paper. The White Paper is now being referred to the Financial Condition (E) Committee for review and further consideration. …
Read More NAIC Subgroup Approves Draft White Paper On Life Insurers’ Use of Captives and SPVs for Reinsurance Transactions

Earlier this month, Prudential Financial, Inc. and American International Group, Inc. confirmed that they received notice of a proposed determination by the Financial Stability Oversight Council (“FSOC”) that they should be subject to stricter prudential regulatory standards and supervision by the Board of Governors of the Federal Reserve System as systemically important financial institutions (“SIFIs”), pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Read More FSOC Closer to Formal Designation of SIFIs

Last month, Representatives Gary Miller (R-Calif.) and Carolyn McCarthy (D-N.Y.) introduced a bill that would prohibit the Board of Governors of the Federal Reserve System (the “FRB”) from imposing additional capital standards on insurers that are designated as systemically important financial institutions (“SIFIs”). …
Read More Proposed Limitations on Fed’s Power Over Nonbank SIFIs